Car Insurance in Crisis and Mandatory 3rd party





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  1. #1
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    Default Car Insurance in Crisis and Mandatory 3rd party

    Poached from another forum, I am not sure of teh original source, might be a news article:

    Drastic steps are required to ensure that motor insurance remains affordable for consumers and that their insurance companies can continue offering motor vehicle cover.

    South Africans are paying more for motor insurance here than in any other country and insurance companies have for the past two years or more been showing burgeoning losses in their motor book.

    Because many people find the premiums for motor insurance unaffordable, only about 35% of the just over 9.5m vehicles on the roads are insured.

    Nevertheless, the number of accident claims received by insurance companies keeps rising and the cost of repairs is extremely high.

    The South African Insurance Association (SAIA) has now launched a comprehensive strategy to ensure that affordable and sustainable cover will become available to South Africans in future.

    Viviene Pearson, who was appointed head of motor insurance at SAIA in April, says the costs of repair work and the incidence of accidents are soaring and pushing up both insurers and consumers’ costs.

    Crime and road safety also play a role in the high number of vehicle-related claims.

    Pearson says some of the smaller insurers have already indicated that they can no longer offer motor cover. The premiums that they collect are not enough to pay the claims.

    In 2008 short-term insurers, according to the latest available statistics, collected R20.8bn in premiums for motor insurance and paid out R14.8bn on claims.

    Crime is no longer the biggest problem, although it still occurs.

    Pearson says in 2002, before the insurance industry and the SAIA took steps to combat hijacking and vehicle theft, crime-related claims represented 60% to 70% of motor vehicle claims.

    Currently claims for accident damage comprise 70% to 80% of the claims.

    If insurance companies can no longer offer vehicle insurance, this will ripple out to the entire economy and those providing finance.

    Financial institutions will no longer provide finance and people will no longer buy cars, which would seriously impact the motor industry.

    The SAIA, in collaboration with industry, has drawn up an action plan that was accepted in February.

    Committees are being appointed to attend to the various problems.

    One of the major problems is the behaviour of drivers, says Pearson.

    There are many problems regarding fraudulent driving licences, the lack of driving skills and corruption in the licensing divisions. Driving under the influence is also a serious issue.

    According to figures from Arrive Alive, cases of driving under the influence of alcohol soared 336% for all categories of vehicle between 2004 and 2008.

    The SAIA is going to attempt to make driving skills and general road safety part of the school curriculum.

    Part of the SAIA’s plan is also to introduce regular roadworthiness tests for all vehicles. A roadworthiness test is currently done only when a vehicle is reregistered.

    Repair costs

    The cost of repairs is a massive problem for insurers.

    Santam personal insurance underwriter Attie Blaauw says repair costs are an even greater problem than motor car theft.

    Blaauw says as the vehicle becomes older the insurance premium declines, despite repair costs remaining high.

    Pearson notes that in the new strategy ways to make spare parts and components cheaper are being investigated. This would be done in close cooperation with the motor industry.

    Insurance companies are haemorrhaging. They don't wish to get rich from motor insurance, but only make a profit and keep premiums affordable, says Pearson.

    The poor condition of roads and motor vehicles also contributes to the high accident and claim statistics.

    The average motor vehicle on South African roads is 10 years old and taxis are on average 13 years old.

    This means that many vehicles are not roadworthy, even though they are licensed.
    And another one on 3rd party:

    Government is considering making third-party insurance compulsory for all drivers using public roads, said Minister of Transport S'bu Ndebele on Thursday.

    Ndebele's statement follows on the back of figures released by the Democratic Alliance, which showed about 65% of the 8.5 million vehicles on South Africa's roads are not insured. This, argued the DA, puts the burden of compensation for accidents on insured drivers and insurance companies.

    In reply to a question in parliament, Ndebele said the strategy of making third-party insurance mandatory was on the cards. However, it would require careful consideration of several factors, including the financial status of motor vehicle owners and the present fuel levy system.

    Ndebele also said even though third-party insurance is not mandatory at the moment, accident victims may pursue compensation through the courts.

    Ndebele also confirmed that the demerit point system for traffic offenses (Administrative Adjudication of Road Traffic Offences, or Aarto) will have been rolled out fully to all municipalities by December, despite the fact that pilot projects have highlighted some system glitches.

    "The allocation of demerit points to infringers will be introduced on a national basis from April 1 2011. To date the pilot project in both the municipalities of Tshwane and Johannesburg has revealed a number of aspects that needed to be addressed. These relate mainly to legislative, operational and systems aspects," said Ndebele.

    "Systems performance issues relate to the electronic uploading of infringement information, and the online, real-time updating of transactions onto the National Contraventions Register," said Ndebele.
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  2. #2
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    Well Biggles... all I can say is about time. the reality is - the average uninsured car is the one causing the accident.

    If you are a bad driver and can't get insured - you can't get on the road with mandatory insurance -if a company like a bus/taxi company has too many accidents - their premiums go through the roof. they pay more. good.

    with more contributing to the pot my premiums go down!! nice.

  3. #3
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    Yes been following this for the last few days its been on :
    http://www.wheels24.co.za/News/Gener...lsory-20100625

    But as usual our administration comes up with what is possibly a very good idea but the execution of the idea is where the *&% hits the fan, much like the "taxi's limited to 80kmph" hahahaha thats a law ja right thanks for that!!! and the lisencing point system is also already dead in the water as they cant even ademinister the vehicle registration data base:
    http://www.wheels24.co.za/News/Gener...talls-20100625

    They gonna spend gizillion Rand on consultants again and it will all just be another waste of time and tax payers money.

    Sorry if I sound negative here I dont mean to but I must admit that getting every one compusory insurance is a great idea if they can get it done.

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    Saw the article in Die Burger as well

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    Interesting to see how they will administer it. Definitely have to do it nationally so the rest of the country can subsidise provinces like Mpumulanga and Limpopo. Claiming will no doubt be a nightmare and everytime someone gets bumped you will be getting calls for lawyers wanting to organise the claim.

    Hopefully our premiums + 3rd party drop below the level of current premiums. But I doubt it. Someone will be lining thier livingroom with rands.
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    I think insurance companies are also to blame for high insurance premiums. There is a recovery company on the same premises where we are and we always see what vehicles come in and go out. I am not in the vehicle trade but I am sure a huge percentage of vehicles written off, can be repaired.

    I also agree that some sort of insurance must be compulsory. In the USA you are not allowed to drive without insurance. The problem is that as soon as the economy hurts, the first to be canceled, is motor insurance.

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    In Peru you had to get a 3rd party insurance disk and it went on the window. It was in plain view... colour changed with the year so out of date 3rd party could be seen from a mile away. Was a state run thing.
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    A slow and steady decline in all things.. sad to see the $£%*&! is going to hit the fan and not be able to stop it.. bad thing about this is.. if it does hit, it is not distributed evenly..


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    Quote Originally Posted by Apocalypse View Post
    Well Biggles... all I can say is about time. the reality is - the average uninsured car is the one causing the accident.

    If you are a bad driver and can't get insured - you can't get on the road with mandatory insurance -if a company like a bus/taxi company has too many accidents - their premiums go through the roof. they pay more. good.

    with more contributing to the pot my premiums go down!! nice.
    Sorry to dissapiont you , have not had insurrance for the past 15 years. And have NOT caused a accident ,or been involved in one
    I think i am the average person you are talking about. Just think it is a
    ripp-off Yes my Landy is a 1992 and platkar is a 1997 and insurance companies frown at you when you approach them and tell you "its not worth it" to insure your vechile?? Where to now??
    To me , my vechiles are worth more ??
    Just my 2c

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    Does S'bu Ndebele know what he is talking about? An he is the National Minister of Transport?

    Is this a joke, is it the 1st of April?

    Many years ago we had to buy 3rd Party insurance on the 1st of May every year from an insurance company and display the disc on your car's windscreen. Then they did away with it in that format and added the cost of 3rd party insurance into the fuel price.

    It was considered more fair, as people who travelled bigger distances paid more 3rd Party insurance that way.

    So, in reality, every person who buys petrol or diesel (yes even for his lawnmower) pays 3rd party insurance.

    Now, if they are talking about short term motorvehicle insurance, that is a diffirent story!!!

    So Mr Ndebele, get your facts straight about 3rd Party insurance!!!
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  11. #11
    Beans Guest

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    Now that in interesting My insurance company refused to insure my car and house because i claimed too much, I could only get insurance for my vehicle if if did not drive it. I pointed out to my insurace company that i was out of the 4 claims that i made i was only in the vehicle once and it was not my fault and the other times my vehicle was damaged by other parties. Now try and get insurance as i would assume you are blacklisted with the insurance company. i could not even get insurance on my house hold contents.

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    i think maybe they mean balance of third party insurance. in the UK you have to produce your insurance certificate before you can get your road tax disc. the police can check on their database if your car is taxed and insured. the insurance companys make a fortune because it is compulsory and if you live in the wrong post code you pay a fortune.

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    Quote Originally Posted by johannes14 View Post
    Sorry to dissapiont you , have not had insurrance for the past 15 years. And have NOT caused a accident ,or been involved in one
    I think i am the average person you are talking about. Just think it is a
    ripp-off Yes my Landy is a 1992 and platkar is a 1997 and insurance companies frown at you when you approach them and tell you "its not worth it" to insure your vechile?? Where to now??
    To me , my vechiles are worth more ??
    Just my 2c
    You are not part of the problem... yet... but when you run your Landy into the back of a brand new BMW 750iL and cause R200000 worth of damage (and you cannot pay for the repair out your pocket) you become part of the problem.

    No-one is planning to have an accident, that is why they are called accidents. So when it does happen (and statistically it will) will you be able to accept the concequences of your actions and pay for the repair of the other vehicle? The crotch of the problem is that there are too many people (65% of car owners) who probably cannot.

    A question? Can you get only 3rd party insurance for your vehicles through a broker?.
    Last edited by Biggles; 2010/06/28 at 10:29 AM.
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    Quote Originally Posted by Biggles View Post
    A question? Can you get only 3rd party insurance for your vehicles.
    Yip.

    Got 3rd party ins. for my 89 Landy. R120pm. For piece of mind, like you said, I would not like to drive into the back of some expensive "platkar" and not have any kind of insurance...

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    Quote Originally Posted by mvcoller View Post
    Does S'bu Ndebele know what he is talking about? An he is the National Minister of Transport?

    Is this a joke, is it the 1st of April?

    Many years ago we had to buy 3rd Party insurance on the 1st of May every year from an insurance company and display the disc on your car's windscreen. Then they did away with it in that format and added the cost of 3rd party insurance into the fuel price.

    It was considered more fair, as people who travelled bigger distances paid more 3rd Party insurance that way.

    So, in reality, every person who buys petrol or diesel (yes even for his lawnmower) pays 3rd party insurance.

    Now, if they are talking about short term motorvehicle insurance, that is a diffirent story!!!

    So Mr Ndebele, get your facts straight about 3rd Party insurance!!!
    From the article they are considering the fuel levy and (the biggest joke) financial status of vehicle owners.

    I heard that they included the 3rd party into the fuel levy... but anyone know anyone who has ever recieved a 3rd party payout?
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    Quote Originally Posted by Scotty View Post
    Yip.

    Got 3rd party ins. for my 89 Landy. R120pm. For piece of mind, like you said, I would not like to drive into the back of some expensive "platkar" and not have any kind of insurance...

    My5c.
    Sweet. Would actually consider doing that with the Jeep. Will save me a packet.
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    Quote Originally Posted by Biggles View Post
    I heard that they included the 3rd party into the fuel levy... but anyone know anyone who has ever recieved a 3rd party payout?
    There is no 3rd party insurance as part of the fuel levy... that is the Road Accident Fund which only compensates for medical bills, not vehicular damage.
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    Quote Originally Posted by johannes14 View Post
    Sorry to dissapiont you , have not had insurrance for the past 15 years. And have NOT caused a accident ,or been involved in one
    I think i am the average person you are talking about. Just think it is a
    ripp-off Yes my Landy is a 1992 and platkar is a 1997 and insurance companies frown at you when you approach them and tell you "its not worth it" to insure your vechile?? Where to now??
    To me , my vechiles are worth more ??
    Just my 2c
    Anyone who drives without balance of 3rd party insurance should be shot IMO - and it is also my opinion that it MUST be compulsory. One day, you might cause an accident, and it might be a sports car, and you might cause death or injury.

    Your personal liability insurance (if you have any) will not cover you if the other party sues you for the repairs to their vehicle.
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    Quote Originally Posted by johannes14 View Post
    Sorry to dissapiont you , have not had insurrance for the past 15 years. And have NOT caused a accident ,or been involved in one
    I think i am the average person you are talking about. Just think it is a
    ripp-off Yes my Landy is a 1992 and platkar is a 1997 and insurance companies frown at you when you approach them and tell you "its not worth it" to insure your vechile?? Where to now??
    To me , my vechiles are worth more ??
    Just my 2c

    Johannes - no fingers being pointed!! but the reality is - if you don't have balance of third party you are exposing yourself horribly. If I'm in front of you and stop suddenly for, say, a dog in the road and you climb into the back of my car and cause, say, R200 000 damage - its an accident and it's not pointing fingers, they happen, just an example - I have no problem - my insurance coughs up (okay - I pay the excess) the insuraance is then going to claim that money back from YOU. If you have a house - they will take it. with 3rd party - you still lose your car in the accident - but at least you are not liable for the R200 000. now - what if it is a R3 000 000 Ferrari you trash? 3rd party will cover you - for about R120 a month.

    I've been driven into 4 times in my life - EVERY time it was an older car with no insurance.

    If everyone has insurance then actually - for this reason MY premiums come down.

    good for me, bad for someone who currently "self insures" i.e. takes the risk themselves.

    but the bonus is - if you can't get insurance you can't get on the road. so BAD drivers - stay off the road. this is a far more effective way of reducing the death toll than putting up speed traps.

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    i agree with simon, the min requirement should be balance of third party. you used to be able to get balance of third party, fire and theft cover.

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